IB or TW for trading US options, which?

Discussion in 'Retail Brokers' started by EliteFan, Dec 24, 2019.

  1. EliteFan

    EliteFan


    1. I am a HongKong Australian living in HongKong and appreciate it if veterans or users of both IB and TastyWorks, give me advice on choosing one of these brokers for trading mainly US options. I know some users of both and from what I have heard is IB 1. allow FX trades so I could buy or sell the $AUD, and 1b. get it telegraphically transferred to my local bank free once a month, whereas TW charge $45 everytime :(
      2. TW charge a whopping $200 for 'Transfer on Death Account Transfer Fee' but is that even needed if we have a will?
      3. https://www.interactivebrokers.co.u...ex=us&rgt=0&rsk=0&pm=1&rst=020204100401010801 IB says those in HKG who trade US options get portfolio margining. what is the difference between Risk-based margin, and portfolio margin? And would that make it advantageous to TW margining system?

      4. I noticed that the margin costs for TW are substantially higher, will this matter for mainly short selling options with ~70K USD account? 4b. Check 'margin rates' in https://tastyworks.com/commissions-and-fees/ and compare to https://www.interactivebrokers.com/en/index.php?f=1340 which seems to offer greater than half price. Do they both offer equal rates for stock borrowing costs, when shorting?

      5. customer service, TW are easily superior, in knowledge and willingness to help you understand. IB quite horrendous!
    6. Heard IB liquidates quite spontaneously from forums and a user who had over 80% excess liquidity, yet had all his US options liquidated!

    7. TW software is a dream compared to IB for ease in trading options
    I am not talking about the look, yes IB does look older, but that doesnt matter to me, its the fast, easy functionality TW has, it could look decades old, but its functionality is a dream in comparison.
    8. probably most importantly, TW account holders are SIPC protected, whereas IB (HK) are not and anything you hold that is not HKG, will not be protected if the worse happens.

    Please share your views to help me decide. Nice if can comment on the numbered points made . Cheers Elite!
     
  2. qwerty11

    qwerty11

    tw has exercise fee...
     
    EliteFan and ET180 like this.
  3. ET180

    ET180

    True, they currently charge $5 exercise / assignment.

    https://tastyworks.com/commissions-and-fees/

    Even TD dropped their $16 assignment fee to nothing. That was originally why I went with IB.
     
    EliteFan likes this.
  4. IB is cheaper, but beware of its 'exposure fees' which adds up if you take nonlinear risks
     
  5. EliteFan

    EliteFan

    TD will also price match for commissions l think. Just compare the ease of entering an order esp multi leg combo order. TW is so easy, eg to increase or decrease number in the legs, redo / undo, and being able to see the greeks immediately. IB keep you waiting for this and to adjust legs, you have to do each leg individually. redo / undo important time saver too. heard IB allow 6 leg combos though, TW only 4. how are you finding IB software? (please keep your trading performance aside as that may bias us)
     
  6. EliteFan

    EliteFan

    please elaborate on 'exposure fees' and nonlinear risks.
    thought their margin fees were the cheapest? l would try to keep portfolio of options delta (spy weighted)neutral biased
     
  7. ET180

    ET180

    A simple google:

    https://ibkr.info/node/3114

    There's a difference between exposure and neutral option delta. It's possible to construct a portfolio with overall 0 delta, but still take on a lot of risk.
     
    blueraincap likes this.
  8. ET180

    ET180

    I actually really like IB TWS. Especially the position delta feature which shows the overall delta of a given position (stock or ETF). I suspect ThinkorSwim also does that. From the Option Chain window, it's easy to set up multi-leg option positions. The only thing I wish TWS had was the ability to use it behind a firewall. I can connect to TOS from work, but not TWS since TWS uses not standard ports. Other than that, there's nothing else that I wish TWS had that TOS has. I guess TOS loads faster. Both are Java-based.